ASX/Media Release FINANCIAL REPORT OF STAPLED COMPANY ... · 26/08/2015 · FINANCIAL REPORT OF STAPLED COMPANY, ASTRO JAPAN PROPERTY GROUP LIMITED Astro Japan Property Group (ASX:

ASX/Media Release

26 August 2015

FINANCIAL REPORT OF STAPLED COMPANY, ASTRO JAPAN PROPERTY GROUP LIMITED Astro Japan Property Group (ASX: AJA) earlier today announced its full year results to 30 June 2015 and released the Appendix 4E (Preliminary Final Report) and the Annual Financial Report covering the operations of the Astro Group as a whole. In accordance with the Corporations Act 2001 (Cth), the Astro Group prepares two annual financial reports for release to the ASX: one report which covers the operations of the Astro Group as a whole (released earlier today); and another smaller report which covers only the stapled company, Astro Japan Property Group Limited and its controlled entity. Please find attached the Financial Report for Astro Japan Property Group Limited for the period ended 30 June 2015 covering the operations of only the stapled company. This Report should be read together with the Annual Financial Report of the Astro Group released earlier today. ENDS

Investor & Media Enquiries:

Eric Lucas John Pettigrew

Senior Advisor Chief Financial Officer

Phone: +81 3 3238 1671 (Japan) Phone: +61 2 8987 3902

About Astro Japan Property Group (AJA) Astro Japan Property Group is a listed property group which invests in the Japan real estate market. It currently holds interests in a portfolio comprising 31 retail, office and residential properties. Asset management services in Japan are generally undertaken by Spring Investment Co., Ltd. AJA is a stapled entity comprising Astro Japan Property Trust (ARSN 112 799 854) and Astro Japan Property Group Limited (ABN 25 135 381 663). For further information please visit our website: www.astrojapanproperty.com. F

or p

erso

nal u

se o

nly

http://www.astrojapanproperty.com/

Astro Japan Property Group Limited(ABN 25 135 381 663)

31-Dec-09

Annual Financial Report

30 June 2015

Through our website, we have ensured that our corporate reporting is timely, complete and available globally at minimum cost to the Astro Group. All

press releases, financial reports and other information are available on our website: www.astrojapanproperty.com

The consolidated financial statements of AJCo Group comprise Astro Japan Property Group Limited (ABN 25 135 381 663) (AJCo) and its controlled

entity.

Important: These financial statements should be read in conjunction with the consolidated

financial statements of the Astro Group for the year ended 30 June 2015, which were released

to the ASX on 26 August 2015

For

per

sona

l use

onl

y

Directors’ Report 1

Auditor’s Independence Declaration 8

Consolidated Statement of Profit or Loss and Other Comprehensive Income 9

Consolidated Statement of Financial Position 10

Consolidated Statement of Cash Flows 11

Consolidated Statement of Changes in Equity 12

Notes to the Financial Statements 13

1 Statement of significant accounting policies 13

2 Revenue 17

3 Expenses 17

4 Income tax expense 17

5 Earnings per stapled security 18

6 Cash and cash equivalents 18

7 Trade and other receivables 18

8 Intangible assets 19

9 Financial assets carried at fair value through the profit or loss (FVTPL) 19

10 Remuneration of auditors 20

11 Contributed equity 20

12 Accumulated losses 20

13 Dividends 20

14 Notes to the consolidated statement of cash flows 21

15 Financial Risk Management 21

16 Fair value measurement of financial instruments 23

17 Director and executive disclosures 24

18 Related parties 24

19 Contingent asset and liabilities 25

20 Lease commitments 25

21 Parent entity financial information 25

22 Events occurring after the end of the reporting period 25

Directors’ Declaration 26

Independent Auditor’s Report 27

CONTENTS

For

per

sona

l use

onl

y

DIRECTORS' REPORTfor the year ended 30 June 2015

The Astro Japan Property Group

Principal activities

Financial and operating review

Share buy-back

Likely developments and expected results of operations

Dividends

The Directors have not declared any dividends for the year ended 30 June 2015 (2014: nil).

Significant changes in the state of affairs

Environmental regulation

Matters subsequent to the end of the financial year

Stapled securities on issue

The Directors of Astro Japan Property Group Limited (ABN 25 135 381 663) ("AJCo") present their report together with the consolidated

financial statements of AJCo and its controlled entity ("AJCo Group" or "Group") for the year ended 30 June 2015.

The registered office and principal place of business of AJCo is Suite 4, Level 10, 56 Pitt Street, Sydney NSW 2000.

The principal activities of AJCo remain unchanged from 30 June 2014 and are:

• holding 100% of the issued share capital of Astro Japan Property Management Limited ("Responsible Entity"), the Responsible Entity of

AJT; and

• holding a 25% economic interest in Spring Investment Co. Ltd ("Japan Asset Manager"), which is the manager of the Astro Group’s

Japanese property interests.

In the opinion of the Directors, other than the items already noted in the Directors’ Report, there were no changes in the state of affairs of

AJCo that occurred during the period under review.

The Directors are not aware of any further matter or circumstance occurring since 30 June 2015 not otherwise dealt with in the financial

report that has significantly or may significantly affect the operations of the AJCo Group, the results of those operations, or the state of

affairs of the AJCo Group in subsequent financial years.

The Astro Japan Property Group ("Astro Group") comprises Astro Japan Property Trust (ARSN 112 799 854) ("AJT") and its controlled

entities and AJCo and its controlled entity. The shares in AJCo are stapled to the units in AJT on a 'one for one' basis and together are

referred to as 'stapled securities'. AJCo and AJT are separate legal entities under the Corporations Act 2001 (Cth) so are therefore

required to separately comply with the reporting and disclosure requirements under the Corporations Act 2001 (Cth), Australian Accounting

Standards and other authoritative pronouncements of the Australian Accounting Standards Board and Urgent Issues Group Interpretations.

This report is in respect of the AJCo Group.

AJCo Group made a profit after income tax of $669,141 for the year ended 30 June 2015 (2014: $1,745,976).

There were 60,652,466 stapled securities on issue as at 30 June 2015 (30 June 2014: 67,211,752). Each stapled security comprises one

unit in AJT and one share in AJCo.

In the year ended 30 June 2015, the primary source of the AJCo Group's revenue was obtained from its deemed parent AJT. As such, the

future developments of the AJCo Group are reliant on the future developments of AJT.

To the best of their knowledge and belief after making due enquiry, the Directors have determined that AJCo has complied with all

significant environmental regulations applicable to its operations in the jurisdictions it operates.

On 26 September 2014, the Astro Group announced its intention to undertake an on-market buy-back of up to 3,360,587 stapled securities

representing approximately 5% of its issued capital. The on-market securities buy-back programme commenced on 22 October 2014 and

ceased on 24 April 2015, and during that period the Astro Group purchased and cancelled 1,618,886 stapled securities for a total

consideration of $7,924,072, with prices ranging from $4.30 to $5.00. Of the total consideration, $375,814 related to 1,618,886 shares in

the AJCo Group that were purchased and cancelled.

On 24 April 2015, the Astro Group announced its intention to undertake an off-market buy-back. The off-market buy-back was successfully

completed on 4 June 2015, and the Astro Group purchased and cancelled 4,940,400 stapled securities for a total consideration of

$26,184,120, or $5.30 per stapled security. Of the total consideration, $1,248,933 related to 4,940,400 shares in the AJCo Group that were

purchased and cancelled.

Page 1 ASTRO JAPAN PROPERTY GROUP LIMITED

For

per

sona

l use

onl

y


Directors

Qualifications and experience

Allan McDonald

John Pettigrew

Director Listed Entity Date appointed Date ceased

Allan McDonald 22 October 2003 Continuing

Multiplex European Property Fund² 1 January 2010 Continuing

Brookfield Prime Property Fund² 1 January 2010 Continuing

Billabong International Limited 4 July 2000

Brookfield Australian Opportunities Fund² 1 January 2010

4 May 2011

Doug Clemson - - -

Kate McCann - - -

John Pettigrew Rubicor Group Limited 2 March 2007

Doug was appointed as a Director of AJCo and as a Director of the Responsible Entity on 31 December

2011.

Independent Non-Executive

Director

Doug has extensive financial and commercial experience as a CFO and senior executive of Australian and

international companies in the construction, manufacturing and finance fields. He has over 25 years

experience as a Director on various listed company and unlisted company boards and he has been the

chairman of the audit, risk and compliance committee of ASX listed companies (most recently Infigen

Energy Group) since 2002. He is a Fellow of the Institute of Chartered Accountants in Australia and New

Zealand and a Fellow of the Australian Institute of Company Directors.

John has extensive financial and commercial experience with a number of major corporations and 36 years

involvement in the property industry. John is a Fellow of the Australian Society of Certified Practicing

Accountants, a Fellow of the Governance Institute of Australia, a Fellow of the Chartered Institute of

Secretaries, a Fellow of the Australian Institute of Management and a Fellow of the Australian Institute of

Company Directors. John was Chief Financial Officer and Company Secretary of the Stockland Group from

1977 and Finance Director from 1982 until March 2004. He has had a significant role in structuring and

managing listed property trusts since 1980.

Directorships of other listed entities held by Directors during the three years preceding 30 June 2015 are listed below:

Member of the Remuneration

Committee

Allan has extensive experience in the investment and commercial banking fields and is presently associated

with a number of companies as a consultant and company director. Allan holds a Bachelor of Economics

Degree from the University of Sydney and is a Fellow of the Australian Society of Certified Practicing

Accountants, a Fellow of the Governance Institute of Australia, a Fellow of the Australian Institute of

Management and a Fellow of the Australian Institute of Company Directors.Member of the Audit, Risk &

Compliance Committee

John was appointed as a Director of AJCo on 20 March 2009 and as a Director of the Responsible Entity on

19 February 2005. John became an Executive Director on 1 January 2011 upon his appointment as Chief

Financial Officer.

The Directors of AJCo and the Responsible Entity (Directors) at any time during or since the 12 month period ended 30 June 2015 are:

Doug Clemson

Kate McCann

Name, independence status

and special responsibilities


Chairman

Allan was appointed as a Director of AJCo on 20 March 2009 and as a Director of the Responsible Entity on

19 February 2005.

22 June 2015

Chairman of the Audit,

Risk & Compliance Committee

Member of the Remuneration

Committee

Kate was appointed as a Director of AJCo and as a Director of the Responsible Entity on 31 December

2011.


Director

Kate has extensive financial and commercial experience, with 15 years at McKinsey & Company, including

her role as Principal from 1999-2002. Kate has been a non-executive director of private, global and not-for-

profit organisations. She is currently a non-executive Director of General Re Australia Ltd and General Re

Life Australia Ltd, and is the Chairman of the Remuneration Committee and a member of the Audit

Committee of each of those companies.

Chairman of the Remuneration

Committee

Member of the Audit, Risk &


Executive Director, Chief

Financial Officer

2. Director of the responsible entity, Brookfield Capital Management Limited.

1. Director of the responsible entity, Brookfield Funds Management Limited.

3 June 2014

Multiplex SITES Trust¹

Brookfield Office Properties Inc. (dual listed on NYSE

and TSE)

29 October 2012

(Delisted)

24 October 2012


For

per

sona

l use

onl

y


Directors' Meetings

Director

H A H A H A H A

Allan McDonald 16 16 16 16 4 4 2 2

Doug Clemson 16 16 16 16 4 4 2 2

Kate McCann 16 16 16 16 4 4 2 2

John Pettigrew 16 16 16 16 - - - -

H – Indicates the number of meetings held while the relevant Director was a member of the Board/Committee

A – Indicates the number of those meetings attended by that Director

Directors’ relevant interests

Director Number of Stapled Securities

Allan McDonald 40,000

Doug Clemson 3,000

Kate McCann -

John Pettigrew -

Secretaries

Rohan Purdy

John Pettigrew

Indemnities and Insurance Premiums

- Indemnities

No liability has arisen under these indemnities as at the date of this report.

- Insurance premiums

AJCo indemnifies each person who is or has been a Director or Secretary against any liability incurred by the person in the discharge of

their duties as an officer of AJCo, except:

where the liability arises out of conduct involving a lack of good faith;

Responsible Entity

AJCo’s Constitution also provides that AJCo indemnifies each person who is or has been a Director or Secretary on a full indemnity basis

and to the full extent permitted by law against all losses, liabilities, costs, charges and expenses incurred by the person as an officer of

AJCo or of a related body corporate.

where the liability is owed to AJCo or a related body corporate; and

As part of its insurance arrangements, AJCo pays insurance premiums in respect of a Directors and Officers liability insurance contract

covering Directors and Officers of AJCo. Under the terms of the Directors and Officers insurance contract, AJCo is prohibited from

disclosing the nature of the liabilities indemnified and the amount of the insurance premium paid.

John was appointed as Company Secretary (alternate) of AJCo and as Company Secretary (alternate) of

the Responsible Entity on 1 January 2011.

to the extent that AJCo is precluded by law from indemnifying the officer.

Except as set out below, no indemnity was given or insurance premium paid during or since the end of the financial year for a person who is

or has been an officer or auditor of AJCo.

The Company Secretaries of AJCo and the Responsible Entity at any time during or since the 12 month period ended 30 June 2015 are:

AJCo RemunerationAudit, Risk &

AJCo also indemnifies each person who is or has been a Director or Secretary for legal costs incurred by the person in obtaining advice for,

or conducting or defending an action, or appearing or preparing to appear in that action. This indemnity is also subject to the above

exceptions.

Executive Director, Chief

Financial Officer & Company

Secretary (alternate)

General Counsel & Company

Secretary Rohan has extensive experience as a corporate lawyer and company secretary. Rohan previously held

positions as a senior lawyer at Babcock & Brown and the Australian Securities Exchange (ASX). Rohan is a

Fellow of the Governance Institute of Australia and a Member of the Australian Institute of Company

Directors. Rohan holds a Master of Laws from the University of Sydney and a Bachelor of Laws degree and

Bachelor of Commerce degree from the Australian National University.

Rohan was appointed as Company Secretary of AJCo on 20 March 2009 and as Company Secretary of the

Responsible Entity on 16 April 2009.


The names of the Directors in office and the relevant interests of each Director in stapled securities of the Astro Group as at the date of this

report are shown below:

The number of Directors' meetings (including meetings of Committees of the Board) held during the 12 month period ended 30 June 2015,

and the number of meetings attended by each Director, are as follows:

Board Board Committee


For

per

sona

l use

onl

y


Remuneration Report

Executive

Mr J Pettigrew Executive Director, Chief Financial Officer

Non-Executive Directors

Mr Allan McDonald Independent Chairman and Non-Executive Director

Mr Doug Clemson Independent Non-Executive Director

Ms Kate McCann Independent Non-Executive Director

Base pay and benefits, including superannuation; and

Short term incentives.

This report relates to the year ended 30 June 2015.

Remuneration Policy & Approach

The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001 (Cth).

The Astro Group has a formally constituted Remuneration Committee which is currently comprised of the Astro Group’s three Independent

Non-Executive Directors. Its members during the financial year were Ms Kate McCann (Chair), Mr Allan McDonald, and Mr Doug Clemson.

The Remuneration Committee meets annually for the purposes of reviewing and making recommendations to the Astro Group Board on the

level of remuneration of the senior executives and the Directors.

Although the performance of the Astro Group is taken into consideration in the assessment of each executive, the remuneration policy of the

Astro Group is more focused on achievement of the Astro Group’s internal financial and operational objectives. The Astro Group regards

achievement of these objectives as the appropriate criteria for determining remuneration rather than simply measuring relative performance

against a market index or an external comparator group.

Under the Corporations Act 2001 (Cth) only disclosing entities that are listed companies are required to prepare a Remuneration Report.

Accordingly, this report is only required to address remuneration disclosures applicable to AJCo, as AJT is not a listed company.

Notwithstanding, this report addresses the remuneration disclosures of the Astro Group, not just AJCo.

This report outlines the remuneration philosophy and framework currently applicable to the Astro Group, in particular how this relates to the

Astro Group’s senior executives and Directors.

The Astro Group aims to attract, retain and motivate highly skilled people to operate the Astro Group in the best interests of its

securityholders.

The executive pay and reward framework has two components:

Executive remuneration

To determine the total annual remuneration for the executives, the Remuneration Committee conducts an assessment of each executive

based on the individual’s performance and achievements during the financial year and taking into account the overall performance and

achievements of the Astro Group and prevailing remuneration rates of executives in similar positions. This assessment is made in

conjunction with advice from the Astro Group’s Senior Advisor, Mr Eric Lucas, and is the basis for determining the total annual remuneration

for that financial year.

The Senior Advisor to the Astro Group, Mr Eric Lucas, is a contractor to the Astro Group and is paid a monthly fee of ¥100,000. Separately,

the Japan Asset Manager employs Mr Lucas as its Executive Chairman and employs other executives who conduct the asset management

activities in Japan. The Japan Asset Manager is not a member of the Astro Group, and as such the remuneration relating to those

individuals is not borne by the Astro Group or its securityholders. Mr Lucas and the other executives of the Japan Asset Manager are not

considered KMP of the Astro Group.

Key Management Personnel

Key Management Personnel (KMP) are those persons having authority and responsibility for planning, directing and controlling the activities

of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. The KMP of the Astro Group for the

year ended 30 June 2015 were:

The Remuneration Committee endeavours to ensure that the remuneration outcomes strike an appropriate balance between the interests of

the Astro Group securityholders, and rewarding, retaining and motivating the Astro Group’s executives and the Directors.


For

per

sona

l use

onl

y


2015 2014 2013 2012 2011

Net profit attributable to securityholders of the Astro Group ($'000) 43,562 154,820 (12,900) (44,233) (22,004)

Earnings per security of the Astro Group (cents) 65.69 230.35 (20.73) (75.68) (41.52)

Distributions per security of the Astro Group (cents) 28.50 20.00 17.50 15.00 42.50 1

Security price ($) as at 30 June 4.96 4.08 3.00 2.88 2.83

- Base pay

- Short term incentive

Salary Total

Executive $ $ $ $ $

Mr J Pettigrew 2015 267,100 - - 18,783 285,883

2014 259,560 - - 17,775 277,335

Total remuneration 2015 267,100 - - 18,783 285,883

2014 259,560 - - 17,775 277,335

Fixed remuneration1

Executive % % Total

Mr J Pettigrew 100.00 0.00 100.00

Executive Base remuneration per employment contract

Mr J Pettigrew $ 267,100

Length of Contract Open-ended

Frequency of base remuneration review Annual

Benefits

Incentive remuneration

Termination of employment

Eligible for an award of short term incentive remuneration (if any)

as described above

For Mr Pettigrew, employment can be terminated by either party

providing three months’ written notice and the Astro Group may

elect to pay Mr Pettigrew three months’ salary in lieu of notice

Year

Employment Contract for the Executive KMP

The base salary for the executive as at 30 June 2015, in accordance with his employment contract is shown below:

The employment contract for Mr Pettigrew contains the following conditions:

Entitled to participate in Astro Group benefit plans that are made

available

Table 2: Remuneration components as a proportion of total remuneration on an annualised basis

Remuneration of the Executive KMP

Table 1: Remuneration of the Executive KMP for the period ended 30 June 2015

STI cash

bonus

Non-

monetary

benefits

Super-

annuation

The following table sets out summary information about the Astro Group’s earnings and movements in securityholder wealth for the five

years to 30 June 2015:

1Distributions per security for the year ended 30 June 2011 have been adjusted to reflect the 10 to 1 consolidation of stapled securities

completed on 19 January 2011

Base pay is determined by reference to appropriate benchmark information, taking into account an individual’s responsibilities, performance,

qualifications and experience. There are no guaranteed base pay increases in any executive's contracts.

Any short term incentive (STI) entitlement is entirely at the discretion of the Remuneration Committee and any discretionary STI is

determined based on the results of the Remuneration Committee’s assessment of each executive having regard to the overall performance

of the Astro Group during the financial year. Any STI entitlement is paid in cash. The maximum STI bonus in any year is 30% of base

salary. An executive is not entitled to receive an STI bonus if they cease employment with the Astro Group prior to the payment date or

provide or receive notice of termination of employment on or prior to the payment date.

STI cash

bonus

¹ Fixed remuneration consists of salary, non-monetary benefits and superannuation and for the purposes of this table is based on the year

ended 30 June 2015.


For

per

sona

l use

onl

y


Mr Allan McDonald Independent Chairman and Non-Executive Director

Mr Doug Clemson Independent Non-Executive Director

Ms Kate McCann Independent Non-Executive Director

Board/Committee Role Fee per annum

Board Independent Chair $136,500

Director $96,500

Total

Directors Year $ $ $

Mr Allan McDonald 2015 136,500 12,968 149,468

2014 136,500 12,626 149,126

Mr Doug Clemson 2015 96,500 9,168 105,668

2014 96,500 8,926 105,426

Ms Kate McCann 2015 96,500 9,168 105,668

2014 96,500 8,926 105,426

Total remuneration 2015 329,500 31,303 360,803

2014 329,500 30,478 359,978

Proceedings on behalf of AJCo

Auditor’s independence declaration

Non audit services

In addition to the above fees, all Non-Executive Directors receive reimbursement for reasonable travel, accommodation and other expenses

incurred while undertaking Astro Group business.

Table 3: Remuneration of Non-Executive Directors for the period ended 30 June 2015

Short term -

salary and

fees Superannuation

Remuneration of the Non-Executive Director KMP

The following persons were Non-Executive Directors of each of the Responsible Entity and AJCo during the financial year:

The Astro Group Boards determine the remuneration structure for Non-Executive Directors based on recommendations from the

Remuneration Committee. The Non-Executive Directors’ individual fees are annually reviewed by the Remuneration Committee taking into

consideration the level of fees paid to non-executive directors by companies of a similar size and stature. Fees paid to Non-Executive

Directors must fall within the aggregate fee pool approved by securityholders. The current aggregate maximum amount which may be paid

to all Non-Executive Directors is $600,000 per annum, and the aggregate fees currently payable to the Non-Executive Directors per annum

is $329,500 (excluding superannuation). Based on the Remuneration Committee’s annual review of Non-Executive Director fees conducted

on 20 May 2015, there will be no change to the fees for the 12 month period commencing 1 July 2015.

The Non-Executive Directors receive a cash fee for service. They do not receive any performance based remuneration or any retirement

benefits other than statutory superannuation.

Fees paid to the Non-Executive Directors are in respect of their services provided to the Responsible Entity and AJCo.

Fees payable to Non-Executive Directors are set out below:

No proceedings have been brought or intervened in on behalf of AJCo with leave of the Court under section 237 of the Corporations Act

2001 (Cth).

The auditor's independence declaration is included on the page following this Director's Report.

The AJCo Group may decide to employ the auditor, Deloitte Touche Tohmatsu, on assignments additional to their statutory audit duties

where the auditor's expertise and experience with the company and/or the AJCo Group are important.

No person has applied to the Court under section 237 of the Corporations Act 2001 (Cth) for leave to bring proceedings on behalf of AJCo,

or to intervene in any proceedings to which AJCo is a party, for the purpose of taking responsibility on behalf of AJCo for all or part of those

proceedings.


For

per

sona

l use

onl

y


30/06/2015 30/06/2014

$ $

Taxation compliance services 10,000 10,106

Total non audit fees 10,000 10,106

Basis of Preparation

Dated 26 August 2015.

Signed in accordance with a resolution of the Directors pursuant to s.298(2) of the Corporations Act 2001 (Cth).

F A McDonald

Director

Astro Japan Property Group Limited

The financial report for AJCo as at 30 June 2015 has been prepared on a going concern basis as the Directors, after reviewing AJCo’s

going concern status, have concluded that AJCo has reasonable grounds to expect to be able to pay its debts as and when they become

due and payable.

All non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity of the

auditor; and

During the year the following fees were paid or payable for non-audit services provided by the auditor, Deloitte Touche Tohmatsu, of the

AJCo Group, and its related practices:

Year

ended

Year

ended

The Directors have considered the position and, in accordance with advice received from the audit committee, are satisfied that the

provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act

2001 (Cth). The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the

auditor independence requirements of the Corporations Act 2001 (Cth) for the following reasons:

None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for

Professional Accountants, issued by the Accounting Professional and Ethical Standards Broad, including reviewing or auditing the Auditor's

own work, acting in a management or decision making capacity for the AJCo Group, acting as advocate for the AJCo Group or jointly

sharing economic risks and rewards.


For

per

sona

l use

onl

y

For

per

sona

l use

onl

y

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEfor the year ended 30 June 2015

Revenue

Revenue 2(a), 18(c) 1,777,467 1,740,080

Financing income 2(b), 18(c) 303,837 307,978

Distribution income 18(c) 1,511,089 1,310,081

Net gain on financial assets held at fair value through profit and loss 16(b) - 1,263,950

Net foreign exchange gain 33,485 25,341

Total revenue and other income 3,625,878 4,647,430

Expenses

Operating expenses 3 (2,015,836) (2,001,971)

Impairment of goodwill 8(a) (400,000) -

Net losses on financial assets held at fair value through profit and loss 16(b) (110,272) -

Total expenses (2,526,108) (2,001,971)

Profit before income tax 1,099,770 2,645,459

Income tax expense 4 (430,629) (899,483)

Profit for the period 669,141 1,745,976

Other comprehensive income - -

Total comprehensive income for the period 669,141 1,745,976

Total comprehensive income for the year is attributable to:

Members of the Company 669,141 1,745,976

Basic and diluted earnings per share 5 1.01¢ 2.60¢

The Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the Notes to the

Financial Statements.

30 Jun 15

$

Note 30 Jun 14

$


For

per

sona

l use

onl

y

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONas at 30 June 2015

Current assets

Cash and cash equivalents 6 2,688,728 5,176,146

Trade and other receivables 7 976,452 1,019,152

Prepayments 326,793 406,151

Fees receivable - related party - AJT 18 172,929 185,263

Loan receivable - related party - AJT 18 9,923,356 7,735,342

Total current assets 14,088,258 14,522,054

Non-current assets

Property, plant and equipment 25,024 30,603

Financial assets carried at fair value through the profit and loss 9 4,544,112 4,654,384

Intangible assets 8 2,600,000 3,000,000

Deferred tax asset 4(d) 34,746 28,032

Total non-current assets 7,203,882 7,713,019

Total assets 21,292,140 22,235,073

Current liabilities

Trade and other payables 128,341 106,133

Provisions 73,952 52,691

Deferred lease incentive - 4,761

Current tax liabilities 245,434 238,148

Total current liabilities 447,727 401,733

Non-current liabilities

Deferred tax liability 4(e) 386,435 415,387

Total non-current liabilities 386,435 415,387

Total liabilities 834,162 817,120

Net assets 20,457,978 21,417,953

Equity

Contributed equity 11 26,951,949 28,581,065

Accumulated losses 12 (6,493,971) (7,163,112)

Total equity 20,457,978 21,417,953

30 Jun 14

$

30 Jun 15

$

The Consolidated Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements.

Note


For

per

sona

l use

onl

y

CONSOLIDATED STATEMENT OF CASH FLOWSfor the year ended 30 June 2015

Note

Cash flows from operating activities

Receipt of responsible entity fees 1,968,781 2,066,339

Payments from continuing operations (2,071,172) (2,201,586)

Realised foreign exchange gains 33,485 25,342

Interest received 87,469 120,737

Japanese withholding tax paid (324,121) (233,396)

Australian income taxes paid (134,886) (102,614)

Net cash outflow from operating activities 14 (440,444) (325,178)

Cash flows from investing activities

Distributions received 1,553,789 1,117,637

Purchase of property, plant and equipment - (7,586)

Net cash inflow from investing activities 1,553,789 1,110,051

Cash flows from financing activities

Payment for shares bought back (1,629,116) -

Loan to AJT (1,971,647) (569,519)

Net cash outflow from financing activities (3,600,763) (569,519)

Net (decrease)/increase in cash and cash equivalents (2,487,418) 215,354

Cash and cash equivalents at the beginning of the reporting period 5,176,146 4,960,792

Cash and cash equivalents at the end of the reporting period 6 2,688,728 5,176,146

The Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements.

30 Jun 15

$

30 Jun 14

$


For

per

sona

l use

onl

y

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 30 June 2015

$ $ $

Total equity at 1 July 2013 28,581,065 (8,909,088) 19,671,977

Profit for the year - 1,745,976 1,745,976

Other comprehensive income - - -

Total comprehensive income for the year - 1,745,976 1,745,976

Total equity at 30 June 2014 11, 12 28,581,065 (7,163,112) 21,417,953

Total equity at 1 July 2014 28,581,065 (7,163,112) 21,417,953

Profit for the year - 669,141 669,141

Other comprehensive income - - -

Total comprehensive income for the year - 669,141 669,141

Transactions with equity holders in their capacity as equity holders

Share buy-back, inclusive of cost 11 (1,629,116) - (1,629,116)

Total equity at 30 June 2015 11, 12 26,951,949 (6,493,971) 20,457,978

The Consolidated Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial Statements.

Total Note Contributed

Equity

Accumulated

Losses


For

per

sona

l use

onl

y

NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2015

1. Statement of Significant Accounting Policies

(a) Basis of preparation

The principal accounting policies adopted in the preparation of the financial report are set out below.

The financial statements are presented in Australian dollars.

(b) Business combinations

(c) Basis of consolidation

• has power over the investee;

• is exposed, or has rights, to variable returns from its involvement with the investee; and

• has the ability to use its power to affect its returns.

(d) Adoption of new and amended accounting standards

The AJCo Group has adopted all new and amended accounting standards which became effective for annual reporting periods beginning on

or after 1 July 2014. The standards relevant to the AJCo Group are:

Astro Japan Property Group Limited (AJCo) is domiciled in Australia. The AJCo Group comprises AJCo and its controlled entity, Astro

Japan Property Management Limited.

The consolidated financial report for AJCo as at 30 June 2015 has been prepared on a going concern basis as the Directors of AJCo, after

reviewing AJCo’s going concern status, have concluded that AJCo has reasonable grounds to expect to be able to pay its debts as and

when they become due and payable. The AJCo Group is a for-profit entity for the purpose of preparing the financial statements. The

consolidated financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and

financial instruments. Cost is based on the fair values of the consideration given in exchange for assets.

The financial report was authorised for issue by the Directors on 26 August 2015. AJCo has the power to amend and reissue this financial

report.

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative

pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001 (Cth).

The financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting

Standards Board (IASB).

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other

assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the

liabilities incurred and the equity interests issued by the AJCo Group. The consideration transferred also includes the fair value of any

contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are

expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair

values at the acquisition date. On an acquisition-by-acquisition basis, the AJCo Group recognises any non-controlling interest in the

acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of

any previous equity interest in the acquiree over the fair value of the AJCo Group’s share of the net identifiable assets acquired is recorded

as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all

amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.

The AJCo Group consolidated financial statements comprises the assets and liabilities of all controlled entities and the results of all

controlled entities for the financial year. Control is achieved when the AJCo Group:

The AJCo Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more

of the three elements of control listed above.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the AJCo Group

are eliminated in full on consolidation.

AASB 2013-5 Amendments to Australian Accounting Standards – Investment Entities, AASB 1031 Materiality, AASB 2012-3 Amendments

to AASB 132 – Offsetting Financial Assets and Financial Liabilities, AASB 2013-9 Amendments to Australian Accounting Standards –

Conceptual Framework, Materiality and Financial Instruments, AASB 2014-1 Amendments to Australian Accounting Standards – Part A:

Annual Improvements 2010-2012 and 2011-13 Cycles and AASB 2014-1 Amendments to Australian Accounting Standards – Part C:

Materiality

The adoption of these standards did not have any impact on the current period or any prior period and is not likely to affect future periods.


For

per

sona

l use

onl

y


(e) Critical accounting estimates and judgements

i) Estimated impairment of goodwill

ii) Financial assets held at fair value through profit or loss (FVTPL)

(f) Foreign currency

i) Functional and presentation currency

ii) Transactions and balances

(g) Cash and cash equivalents

(h) Revenue

Revenue is recognised for the major business activities as follows:

i) Financing income

Interest income is recognised in profit or loss on a time proportionate basis, using the effective interest rate method.

ii) Responsible entity fees

Arranging and base fees are recognised on a cost recovery basis.

All other revenue is recognised on an accruals basis.

Transactions in foreign currencies are translated at the prevailing foreign exchange rate at the date of the transaction. Monetary assets and

liabilities denominated in foreign currencies at the end of the financial period are translated to Australian dollars at the prevailing foreign

exchange rate at that date. Foreign exchange differences arising on translation of monetary items are recognised in profit or loss. Non-

monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at

the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated

to Australian dollars at the prevailing foreign exchange rates at the dates the fair value was determined.

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of amounts

collected on behalf of third parties.

The AJCo Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom

equal the related actual results. Critical accounting estimates and judgements are continually evaluated and are based on historical

experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to

be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the

carrying amounts of assets and liabilities within the next financial year are discussed below. This includes critical estimates used in

impairment testing of goodwill, refer to note 1(m)(i) and note 8(a).

The AJCo Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note

1(m)(i). The recoverable amount of goodwill has been determined based on fair value less cost to sell calculations. These calculations

require the use of assumptions. Refer to note 8(a) for details of these assumptions and the potential impact of changes to the assumptions.

Items included in the consolidated financial statements are measured using the currency of the primary economic environment in which the

entity operates (“the functional currency”). The consolidated financial statements are presented in Australian dollars, which is the AJCo

Group’s functional and presentation currency.

For the purpose of presentation in the statement of cash flows, cash and cash equivalents comprise cash at bank and a cash bank

guarantee.

The AJCo Group recognises the economic interest in Spring as a financial asset at FVTPL as per note 1(n). The determination of fair value

requires the Astro Group to apply judgement on significant estimates and assumptions. The valuation methodology has been described in

note 16(b).

The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires

management to exercise judgement in the process of applying AJCo’s accounting policies.

iii) Functional currency

Refer to note 1(f) below.

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the

relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid

or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected

life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

The AJCo Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will

flow to the entity and specific criteria have been met for each of the AJCo Group’s activities as described below. The AJCo Group bases its

estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.


For

per

sona

l use

onl

y


(i) Tax

i) Australian income tax

ii) Tax consolidation - Australia

iii) Japanese withholding tax

iv) Deferred tax

(j) Loan payables

(k) Receivables

(l) Contributed equity

Ordinary shares are classified as equity.

(m) Intangible assets

Goodwill

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the

proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in

the cost of the acquisition as part of the purchase consideration.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and

liabilities and their carrying amounts in the financial statements.

The income tax expense or benefit for the year is the tax payable on the current year’s taxable income based on the applicable income tax

rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax

losses.

Effective as of 1 April 2002, all foreign corporations and non-resident individuals that do not have permanent establishments in Japan are

subject to 20.42% withholding tax on the distribution of profits under TK contracts. The 20.42% withholding tax is the final Japanese tax on

such distributed TK profits and such profits are not subject to any other Japanese taxes (assuming that such investor is not a resident

of/does not have permanent establishment in Japan).

AJCo and its wholly-owned Australian controlled entity have implemented the tax consolidation legislation. As a consequence, these entities

are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial statements.

If the entity reacquires its own equity instruments, for example, as the result of a share buy-back, those instruments are deducted from

equity and the associated shares are cancelled. No gain or loss is recognised in profit or loss and the consideration paid including any

directly attributable incremental costs (net of income taxes) is recognised directly in equity.

Goodwill represents the excess of the cost of an acquisition over the fair value of the AJCo Group's share of the net identifiable assets of the

acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on

acquisitions of associates is included in investments in associates. Goodwill is not amortised. Instead goodwill is tested for impairment

annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated

impairment losses, refer to Note 8. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity

sold.

The amount of profit that is allocated to TK investors under a TK agreement is immediately deductible from the TK operator’s taxable

income regardless of whether a distribution to any TK investor is actually made at that time. The 20.42% withholding tax described above

however, is only imposed on an actual distribution of profit to investors.

On a six monthly basis, Spring Investment Co, Ltd will make cash distributions to the AJCo Group. For the most part these distributions can

be expected to be of income for Japanese tax purposes, and thus subject to withholding tax at a rate of 20.42%, however, the cash available

for distribution from the TK may exceed taxable profit for Japanese tax purposes and may therefore be made in part free from Japanese

withholding tax as either a return of capital or (if capital has already been fully returned) as a loan from the TK to the AJCo Group.

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest

method, less provision for impairment. Provision for impairment is booked when there is objective evidence that the AJCo Group will not be

able to collect all amounts due according to the original terms of the receivables. An impairment loss is recognised for the amount by which

the asset carrying amount exceeds its recoverable amount based on the present value of estimated future cash flows.

Loan payables are non-derivative financial liabilities with fixed or determinable payments that are not quoted in an active market. They are

included in current liabilities, except for those with maturities greater than 12 months after the end of the reporting period which are classified

as non-current liabilities.


For

per

sona

l use

onl

y


(n) Financial assets held at fair value through profit or loss (FVTPL)

Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL.

(o) Impairment of assets

(p) Leases

(q) Earnings per Share

(r) Parent entity financial information

i) Investments in subsidiaries

(s) New accounting standards and UIG interpretations

The financial information for the parent entity, the AJCo Group, disclosed in Note 21 has been prepared on the same basis as the

consolidated financial statements, except as set out below.

Investments in subsidiaries are accounted for at cost in the financial statements of the AJCo Group. Dividends received from associates are

recognised in the parent entity's profit or loss, rather than being deducted from the carrying amount of these investments.

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2015 reporting periods. The

AJCo Group’s assessment of the impact of these new standards and interpretations is set out below.

AASB 9 Financial Instruments , AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB

2012-6 Amendments to Australian Accounting Standards – Mandatory Effective Date of AASB 9 and Transition Disclosures

(effective from 1 January 2018)

AASB 9 Financial Instruments addresses the classification and measurement of financial assets and is likely to affect the AJCo Group’s

accounting for its financial assets. The standard is not applicable until 1 January 2018 but is available for early adoption. The AJCo Group is

yet to assess its full impact.

Basic earnings per share is determined by dividing net profit attributable to the shareholders of the AJCo Group by the weighted average

number of shares on issue during the reporting period.

Diluted earnings per share is determined by dividing net profit attributable to the shareholders of the AJCo Group by the weighted average

number of ordinary shares and dilutive potential ordinary shares on issue during the financial year.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net

gain or loss recognised in profit or loss incorporates any capital distribution or interest earned on the financial asset. Fair value is determined

in the manner described in Note 16(b).

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or

more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment

whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised

for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s

fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which

there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-

generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment

at the end of each reporting period.

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an

assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys

a right to use the asset.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the AJCo Group as lessee are classified as

operating leases (see Note 20 for details of leases). Payments made under operating leases (net of any incentives received from the lessor)

are charged to the statement of comprehensive income on a straight-line basis over the period of the lease.

AJCo recognises it’s 25% economic interest in Spring as a financial asset carried at fair value through profit and loss, as it does not have

voting participation at the TK level or exert significant influence over this entity.


For

per

sona

l use

onl

y


AASB 15 Revenue from Contracts with Customers (effective from 1 January 2018)

2. Revenue

a) Revenue from continuing operations

Base fee – AJT 1,777,467 1,740,080

Total revenue from continuing operations 1,777,467 1,740,080

(b) Financing income

Financing income 303,837 307,978

Total financing income 303,837 307,978

3. Expenses

Employee expenses & Directors fees (including payroll tax) 1,216,237 1,205,566

Insurance 337,058 350,468

Depreciation and amortisation 5,579 21,574

Superannuation contributions 91,612 84,349

Regulatory and registrar costs 4,981 3,939

Lease payments 124,102 113,342

Audit fees 44,497 48,290

Professional fees 21,374 13,876

Premises expenses 46,923 49,355

IT expenses 35,086 43,223

Travel expenses 10,126 741

Other expenses 78,261 67,248

Total expenses 2,015,836 2,001,971

4. Income tax expense

(a) Income tax expense

Current tax expense 466,295 497,368

Deferred tax (benefit)/expense (35,666) 402,115

(b) Reconciliation of tax expense

Profit before income tax 1,099,770 2,645,459

Tax expense at the prima facie Australian tax rate of 30% 329,931 793,638

Tax effect of amounts which are not deductible/(assessable) in calculating taxable income:

Goodwill Impairment 120,000 -

Distribution income from Spring (8,591) 102,988

Fair value adjustment to financial assets 33,081 (379,185)

Overhead costs (8,126) (21,182)

466,295 496,259

Adjustments for current tax of prior periods - 1,109

Deferred Australian tax asset on audit accrual 658 (297)

Deferred Australian tax asset on lease incentive 1,428 3,253

Deferred Australian tax asset on rent payable (2,422) -

Deferred Australian tax asset on employee entitlements (6,378) (1,680)

Deferred Australian tax liability on prepayments 4,189 (727)

Deferred Australian tax liability on FV movement of financial asset at FVTPL (33,141) 401,566

Income tax expense 430,629 899,483

30 Jun 15

$

30 Jun 15

$

30 Jun 15

$

AASB 15 outlines a single comprehensive model to use in accounting for revenue from contracts with customers. It supersedes current

revenue recognition guidance including AASB 118 Revenue , AASB 111 Construction Contracts and related Interpretations. The key

principle of this Standard is that an entity will recognise revenue when it transfers promised goods or services to customers for an amount

that reflects its expected consideration. The Standard introduces more prescriptive and detailed implementation guidance than was included

in AASB 118, AASB 111 and the related Interpretations. The Standard is not applicable until 1 January 2018 but is available for early

adoption. The AJCo Group is yet to assess its full impact.

30 Jun 14

$

30 Jun 14

$

30 Jun 14

$

Other than as noted above, the adoption of the various Australian Accounting Standards and Interpretations in issue but not yet effective will

not impact the AJCo Group’s accounting policies. However, the pronouncements will result in changes to information currently disclosed in

the financial statements. The AJCo Group does not intend to adopt any of these pronouncements before their effective dates.


For

per

sona

l use

onl

y


(c) Amounts recognised directly in equity

No amounts have been recognised directly in equity during the reporting period.

(d) Deferred tax assets

The balance comprises temporary differences attributable to:

Employee entitlements 22,185 15,807

Audit accrual 10,139 10,797

Lease incentive - 1,428

Rent payable 2,422 -

34,746 28,032

Movements:

Opening balance at beginning of year 28,032 29,308

Credited/(Debited) to the Consolidated Statement of Comprehensive Income 6,714 (1,276)

Closing balance at the end of the year 34,746 28,032

Deferred tax expected to be recovered within 12 months 32,324 28,032

Deferred tax expected to be recovered after more than 12 months 2,422 -

(e) Deferred tax liabilities

The balance comprises temporary differences attributable to:

Prepayments 18,010 13,821

Fair value movement of financial asset at FVTPL 368,425 401,566

386,435 415,387

Movements:

Opening balance at beginning of year 415,387 14,548

(Credited)/Debited to the Consolidated Statements of Comprehensive Income (28,952) 400,839

Closing balance at the end of the year 386,435 415,387

Deferred tax expected to be settled within 12 months 18,010 13,821

Deferred tax to be settled after more than 12 months 368,425 401,566

5. Earnings per stapled security

Basic and diluted 1.01¢ 2.60¢

Profit attributable to members used in calculating basic and diluted earnings per security 669,141 1,745,976

6. Cash and cash equivalents

Cash at bank 2,562,654 5,030,146

Restricted cash 126,074 146,000

Total cash and cash equivalents 2,688,728 5,176,146

7. Trade and other receivables

Distribution receivable 976,452 1,019,152

Trade and other receivables 976,452 1,019,152

30 Jun 14

$

30 Jun 15

$

30 Jun 15

$

30 Jun 15

$

30 Jun 14

$

The weighted average number of securities used as denominator in calculating basic and diluted earnings/(losses) per security shown above

is based on the number of securities on issue during the period.

Cash at bank and restricted cash are bearing floating interest rates, with a weighted average effective interest rate of 2.03% (2014: 2.54%).

Related to the restricted cash balance is a bank guarantee with NAB provided to Dexus CPA Pty Ltd of $252,074 of which $478 was

undrawn as at 30 June 2015.

Weighted average number of securities used as denominator in calculating basic and diluted earnings per

security 67,211,75266,312,686

30 Jun 15

$

30 Jun 14

$

30 Jun 15

$

30 Jun 14

$

30 Jun 14

$


For

per

sona

l use

onl

y


8. Intangible assets

Year ended 30 June 2014

Opening balance 10,060 3,000,000 3,010,060

Amortisation charge (10,060) - (10,060)

Closing net book amount - 3,000,000 3,000,000

At 30 June 2014

Cost 48,299 14,999,998 15,048,297

Accumulated amortisation and impairment (48,299) (11,999,998) (12,048,297)

Net book amount - 3,000,000 3,000,000

Year ended 30 June 2015

Opening balance - 3,000,000 3,000,000

Impairment charge - (400,000) (400,000)

Closing net book amount - 2,600,000 2,600,000

At 30 June 2015

Cost 48,299 14,999,998 15,048,297

Accumulated amortisation and impairment (48,299) (12,399,998) (12,448,297)

Net book amount - 2,600,000 2,600,000

9. Financial assets carried at fair value through profit or loss (FVTPL)

Financial assets carried at fair value through profit and loss 4,544,112 4,654,384

Management have deemed it appropriate to impair goodwill by $400,000 to a carrying value of $2,600,000 to reflect a decrease in the

calculated recoverable amount of the goodwill. This has been driven by a decline in AJT's gross asset value as a result of both investment

property disposals and foreign currency exchange movements.

30 Jun 15

$

30 Jun 14

$

The AJCo Group's economic interest in Spring is recognised as a financial asset carried at fair value through profit and loss. An overview of

the valuation methodology relating to financial assets carried at fair value through profit and loss is included in note 16.

Software

$

Goodwill

$

Total

$

(a) Impairment test for goodwill

The recoverable amount of the goodwill is based on fair value less costs to sell calculated on a net present value basis. AJPML operates on

a cost recovery basis and is forecast to make nil profit for the foreseeable future. To calculate the net present value of goodwill the

management of the AJCo Group has adopted a methodology which assumes a “market” level of base fee income to arrive at a theoretical

recurring profit after tax level and then calculates the net present value based on a discount rate of 12%, this rate is based upon the ten year

risk-free rate plus an equity risk premium. The theoretical "market" value of base fees (27.5bps) to calculate the value of goodwill is based

upon a reasonable market rate for Responsible Entity fees as evidenced in the market. Budgeted cash flows are projected over a ten year

period as management fees are assumed to be receivable for at least that time period. The valuation assumes nil growth in the gross asset

value based on a long-term growth trend adjusted for future divestments and an increase in AJPML’s overheads of 2.5% per annum based

upon budgeted figures.

All of the goodwill is attributable to AJCo's investment in AJPML and relates to AJPML's management rights with respect to its role as

responsible entity of AJT.


For

per

sona

l use

onl

y


10. Remuneration of auditors

Audit services:

Auditors of AJCo Group

Deloitte Touche Tohmatsu Australia:

- Audit of financial reports 29,500 33,800

- Australian financial services license audit 5,356 5,175

- Compliance plan audit 9,641 9,315

44,497 48,290

Other services:

Auditors of AJCo Group

Deloitte Touche Tohmatsu:

- Taxation compliance services 10,000 10,106

10,000 10,106

11. Contributed equity

Securities on issue

Movements in number of securities Number Number

Number at beginning of financial period 67,211,752 67,211,752

Share buy-back (6,559,286) -

60,652,466 67,211,752

Movements in contributed equity $ $

Balance at beginning of financial period 28,581,065 28,581,065

Share buy-back, inclusive of cost (1,629,116) -

26,951,949 28,581,065

(a) Share buy-back

12. Accumulated losses

Opening balance (7,163,112) (8,909,088)

Net profit attributable to members of AJCo 669,141 1,745,976

Balance at the end of the year (6,493,971) (7,163,112)

13. Dividends

(a) Ordinary securities

No dividends have been paid or declared for the financial year ended 30 June 2015 (2014: $nil)

30 Jun 14

$

Number at end of financial period

Balance at end of financial period

30 Jun 15

$

30 Jun 15

$

30 Jun 14

$

On 26 September 2014, the Astro Group announced its intention to undertake an on-market buy-back of up to 3,360,587 stapled securities

representing approximately 5% of its issued capital. The on-market securities buy-back programme commenced on 22 October 2014 and

ceased on 24 April 2015, and during that period the Astro Group purchased and cancelled 1,618,886 stapled securities for a total

consideration of $7,924,072, with prices ranging from $4.30 to $5.00. Of the total consideration, $375,814 related to 1,618,886 shares in the

AJCo Group that were purchased and cancelled.

On 24 April 2015, the Astro Group announced its intention to undertake an off-market buy-back. The off-market buy-back was successfully

completed on 4 June 2015, and the Astro Group purchased and cancelled 4,940,400 stapled securities for a total consideration of

$26,184,120, or $5.30 per stapled security. Of the total consideration, $1,248,933 related to 4,940,400 shares in the AJCo Group that were

purchased and cancelled.

30 Jun 15

$

30 Jun 14

$


For

per

sona

l use

onl

y


(b) Franked dividends

Franking credits available for subsequent financial years based on a tax rate of 30% (2014 - 30%) 822,645 664,856

14. Notes to the consolidated statement of cash flows

Reconciliation of the net profit after tax to net cash flows from operating activities

Profit for the year 669,141 1,745,976

Adjustments for non cash items and items classified as investing or financing activities

Depreciation and amortisation expense 5,579 21,574

Interest on AJT loan (212,259) (187,240)

Fair value adjustments to financial assets held at FVTPL 110,272 (1,263,950)

Distribution income (1,511,089) (1,310,081)

Impairment of goodwill 400,000 -

Net cash used in operating activities before changes in assets & liabilities (538,356) (993,721)

Change in operating assets and liabilities during the financial period:

Decrease in fee and interest receivable 8,226 138,409

Decrease in prepayments 79,358 43,788

(Increase)/Decrease in deferred tax assets (6,714) 1,276

Increase in current tax liabilities 7,286 161,358

(Decrease)/Increase in deferred tax liability (28,952) 400,839

Increase/(decrease) in trade and other payables, provisions and deferred lease incentives 38,708 (77,127)

Net cash outflow used in operating activities (440,444) (325,178)

15. Financial Risk Management

(a) Market Risks

(i) Interest rate risk

(ii) Currency risk

30 Jun 14

$

30 Jun 15

$

30 Jun 14

$

The franked portions of any final dividends declared after 30 June 2015 may be franked out of existing franking credits or out of franking

credits arising from the payment of income tax in the year ending 30 June 2016.

The above amounts represent the balance of the franking account as at the end of the reporting period, adjusted for franking credits that will

arise from the payment of the amount of the provision for income tax.

The AJCo Group’s activities are exposed to a variety of financial risks, including: market risk (interest rate risk, equity price risk and currency

risk), credit risk, and liquidity risk. The AJCo Group’s overall risk management program focuses on the unpredictability of financial markets

and seeks to minimise potential adverse effects on the financial performance of the AJCo Group.

30 Jun 15

$

The AJCo Group does not mitigate the effect of currency exposure on the Consolidated Statement of Financial Position.

Currency risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the

AJCo Group’s functional currency, AUD, and from net investments in foreign operations. The risk is measured using cash flow forecasting

and sensitivity analysis.

The AJCo Group has a 25% economic interest in the Japan Asset Manager which is denominated in JPY. As a result, the AJCo Group is

exposed to currency risk with respect to movements in the AUD/JPY exchange rate.

The AJCo Group receives interest on its cash at bank at a weighted average effective interest rate of 2.03% at period end. All receivables

and payables are on interest free terms.

Market risk refers to the potential for changes in the market value of the AJCo Group’s investment positions or revenue streams. There are

various types of market risks including exposures associated with interest rates, equity market prices, currency rates and the general market

values of asset classes in which the AJCo Group invests or which it manages.

The AJCo Board has overall responsibility for the establishment and oversight of the AJCo risk management framework. The Board has

established an Audit Risk & Compliance Committee which is responsible for monitoring the identification and management of key risks to

the business. The ARCC meets regularly and reports to the Board on its activities.

The AJCo Group uses different methods to measure different types of risks to which it is exposed. These methods include sensitivity in the

case of interest rate, foreign exchange and other price risks, and ageing analysis for credit risk.


For

per

sona

l use

onl

y


(iii) Sensitivity analysis

2015 2014 2015 2014

$ $ $ $

Net profit/(loss)

Cash and cash equivalents 13,444 25,881 (13,444) (25,881)

Total net profit/(loss) 13,444 25,881 (13,444) (25,881)

(b) Credit Risks

At the end of the reporting period no collateral is held as security for any financial assets of the AJCo Group.

(c) Liquidity Risks

At 30 June 2015

Payables (128,341) - - - -

Current tax payable (245,434) - - - -

Net Maturity (373,775) - - - -

At 30 June 2014

Payables (106,133) - - - -

Current tax payable (238,148) - - - -

Net Maturity (344,281) - - - -

(d) Capital risk management

Credit risk refers to the loss that the AJCo Group would incur if a debtor or other counterparty fails to perform under its contractual

obligations.

The AJCo Group maintains its capital structure with the objective to safeguard its ability to continue as a going concern, to increase the

returns for Securityholders and to maintain an optimal capital structure. The capital structure of the AJCo Group consists of equity as listed

in Note 11. The analysis of capital is provided in these Notes.

To achieve the optimal capital structure, the Board may use the following strategies: amend the distribution policy of the AJCo Group; issue

new securities through a private or public placement; activate the Distribution Reinvestment Plan (DRP); issue securities under a Security

Purchase Plan (SPP); or conduct an on-market buyback of securities.

Less than 6

months

The sensitivity analysis below summarises the sensitivity of the AJCo Group’s financial assets and financial liabilities to interest rate risk

based on reasonably possible changes in interest rates.

The table below analyses the AJCo Group’s financial liabilities into relevant maturity groupings at the end of the reporting period based on

the remaining period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.

The AJCo Group has no significant concentrations of credit risk, other than the loan to AJT of $9,923,356, refer to note 18(c). The credit

quality of all financial assets are consistently monitored in order to identify any potential adverse changes in the credit quality. Cash is held

with an institution with a Standard & Poor's AA long-term credit rating. Receivables are unrated.

Decrease by 50 bpsIncrease by 50 bps

The AJCo Group seeks to limit its exposure to credit risks as follows:

- Conducting appropriate due diligence on counterparties before entering into arrangements with them.

- Obtaining where appropriate, collateral with a value in excess of the counterparties’ obligation to the AJCo Group – providing a “margin of

safety” against loss.

Between 1

and 2 years

Between 2

and 5 years

Over 5 yearsBetween 6-12

months

The AJCo Group’s maximum exposures to credit risk at the end of the reporting period in relation to each class of recognised financial

assets is the carrying amount of those assets as indicated in the statement of financial position.

The AJCo Group manages liquidity risk by maintaining adequate reserves, continuously monitoring forecast and actual cash flows, and

matching the maturity profiles of financial assets and liabilities.


For

per

sona

l use

onl

y


16. Fair value measurement of financial instruments

The AJCo Group recognises the following financial assets and liabilities at fair value on a recurring basis:

• Financial assets and liabilities carried at fair value through profit and loss

(a) Fair Value Hierarchy

Level 1 Level 2 Level 3 Total

Assets

Financial assets carried at fair value through profit and loss

Unlisted investments - - 4,544,112 4,544,112

Total assets - - 4,544,112 4,544,112

Level 1 Level 2 Level 3 Total

Assets

Financial assets carried at fair value through profit and loss

Unlisted investments - - 4,654,384 4,654,384

Total assets - - 4,654,384 4,654,384

The Astro Group holds no Level 1 or Level 2 derivatives.

(b) Fair value measurements using significant unobservable inputs (level 3)

Level 3 fair value movement

Balance at 1 July 2013 3,390,434 3,390,434

Net fair value gain through profit and loss 1,263,950 1,263,950

Balance at 30 June 2014 4,654,384 4,654,384

Balance at 1 July 2014 4,654,384 4,654,384

Net fair value loss through profit and loss (110,272) (110,272)

Balance at 30 June 2015 4,544,112 4,544,112

Sensitivity on changes in fair value of Level 3 financial instruments

Description Change in unobservable input

Fair value of Level 3 Unlisted investments 4,544,112 4,654,384

Increase of 1% in Discount rate (141,277) (144,681)

Decrease of 1% in Discount rate 150,052 153,667

Increase of 10% in AUD/JPY foreign exchange rate (413,101) (423,144)

Decrease of 10% in AUD/JPY foreign exchange rate 504,901 517,176

The AJCo has adopted the classification of fair value measurements into the following hierarchy as required by AASB 13 Fair Value

Measurement and AASB 7 Financial Instruments: Disclosures :

(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)

(b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or

indirectly (i.e. derived from prices) (level 2),and

(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

The following tables present the AJCo Group's financial assets and liabilities measured and recognised at fair value at 30 June 2015 and 30

June 2014:

30 Jun 2015 - $

30 Jun 2014 - $

The following table presents the changes in Level 3 instruments for the periods ending 30 June 2015 and 30 June 2014 for recurring fair

value measurements:

Unlisted

investments1

$

Total

$

1The fair value of the unlisted investment is calculated on a net present value basis, forecast cash flows over ten years are discounted at a

rate of 12%, this rate is based upon the ten year risk-free rate plus an equity premium. The fair value of the unlisted investment is

determined in Japanese Yen and translated to Australian Dollar at the relevant period end foreign exchange rate.

The table below summarises the impact of an increase/decrease in significant unobservable inputs on the AJCo Group's profit for the period

ending 30 June 2015:

30 Jun 14

$

30 Jun 15

$


For

per

sona

l use

onl

y


17. Director and executive disclosures

(a) Key Management Personnel

ii) Other Key Management Personnel

(b) Remuneration of Key Management Personnel

Remuneration of Key Management Personnel is disclosed in the Remuneration Report.

Short-term employee benefits 596,600 589,060

Post-employment benefits 50,086 48,253

(c) Directors loans and other transactions

There were no loans or other transactions made to or from the Directors of the AJCo Group during the year.

18. Related parties

(a) Key Management Personnel

(b) Directors

(c) Transactions with related parties

Related party:

Astro Japan Property Trust

Base fees received/receivable for Responsible Entity services 1,777,467 1,740,080

Loan interest 212,259 187,241

Spring Investment Co, Ltd

Distribution paid and payable from Spring 1,511,089 1,310,081

Outstanding balances

The following balances are outstanding at the reporting date in relation to transactions with related parties:

Receivable

Base fees receivable for Responsible Entity services from Astro Japan Property Trust 172,929 185,263

Loan receivable from Astro Japan Property Trust 9,923,356 7,735,342

30 Jun 14

$

30 Jun 14

$

The table below provides the total amount of receipts/(payments) between the AJCo Group and related parties for the relevant financial year.

30 Jun 15

$

i) Directors

The names of each person holding the position of Director of the Responsible Entity and also the AJCo Group during the financial year were

Mr F A McDonald, Mr J Pettigrew, Mr D Clemson, and Ms K McCann.

30 Jun 15

$

30 Jun 15

$

30 Jun 14

$

The Senior Advisor to the Astro Group, Mr Lucas, is a contractor to the Astro Group and is paid a monthly fee of ¥100,000. Separately, the

Japan Asset Manager employs Mr Lucas as its Executive Chairman and employs the other executives who conduct the asset management

activities in Japan. The Japan Asset Manager is not a subsidiary of the Astro Group, and as such the remuneration relating to those

individuals is not borne by the Astro Group or its securityholders. Mr Lucas and the other executives of the Japan Asset Manager are not

considered KMP of the Astro Group.

Disclosures relating to Key Management Personnel are set out in note 17. Further information can also be found in the Remuneration Report

included in the Directors' Report.

Disclosures relating to directors are set out in note 17 and note 18(d). Further information can also be found in the Remuneration Report

included in the Directors' Report.


For

per

sona

l use

onl

y


(d) Securityholdings

Name

Allan McDonald 40,000 - 40,000

John Pettigrew - - -

Doug Clemson 3,000 - 3,000

Kate McCann - - -

19. Contingent asset and liabilities

20. Lease commitments

No later than 1 year 120,410 33,097

Later than 1 year and no later than 5 years 428,674 -

Total lease commitments 549,084 33,097

21. Parent entity financial information

(a) Summary financial information

The individual financial statements for the parent entity show the following aggregate amounts:

Statement of financial position

Current Assets 8,435,398 8,807,947

Total Assets 21,290,035 22,173,305

Current Liabilities 463,633 353,787

Total Liabilities 832,057 755,354

Shareholder's equity

Issued capital 26,951,949 28,581,063

Retained Earnings (6,493,971) (7,163,112)

20,457,978 21,417,951

Profit for the period 669,141 1,745,976

Total comprehensive income 669,141 1,745,976

(b) Guarantees entered into by the parent entity

The parent entity has not given any guarantees as at 30 June 2015 (30 June 2014: nil).

(c) Contingent liabilities of the parent entity

22. Events occurring after the end of the reporting period

The Directors are not aware of any further matter or circumstance occurring since 30 June 2015 not otherwise dealt with in the financial

report that has significantly or may significantly affect the operations of the AJCo Group, the results of those operations, or the state of

affairs of the AJCo Group in subsequent financial years.

30 Jun 14

$

The parent entity did not have any contingent liabilities as at 30 June 2015.

The AJCo Group has no contingent assets or liabilities or category of contingent assets or liabilities which are material.

The AJCo Group has non-cancellable leases in respect of the office premises and office equipment. Both leases are for a duration of 5

years and are classified as Operating Leases. The minimum lease payments are as follows:

30 Jun 15

$

30 Jun 15

$

30 Jun 14

$

The number of Astro Group securities held by each Director of AJCo and other key management personnel, including their personally

related parties, at the date of this report are set out below. There were no securities issued during the year as compensation.

Balance at

start of year

Change

during

the year

Balance at

end of year


For

per

sona

l use

onl

y

DIRECTORS' DECLARATION

1

a)

b)

2

3

Dated 26 August 2015.

This declaration is made in accordance with a resolution of the Directors pursuant to s.295(5) of the Corporations Act 2001 (Cth).

F A McDonald

Director

Astro Japan Property Group Limited

Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued

by the International Accounting Standards Board.

The Directors have been given the declarations by the Chief Financial Officer required by section 295A of the

Corporations Act 2001 (Cth).

In the opinion of the Directors of Astro Japan Property Group Limited (AJCo):

i) giving a true and fair view of the financial position of the AJCo Group as at 30 June 2015 and of its performance

for the year ended 30 June 2015; and

ii) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional

reporting requirements; and

the Financial Statements and Notes are in accordance with the Corporations Act 2001 (Cth), including:

there are reasonable grounds to believe that AJCo will be able to pay its debts as and when they become due and

payable.


For

per

sona

l use

onl

y

For

per

sona

l use

onl

y

For

per

sona

l use

onl

y

Documents

ASX/Media Release FINANCIAL REPORT OF STAPLED COMPANY ... · 26/08/2015 · FINANCIAL REPORT OF STAPLED COMPANY, ASTRO JAPAN PROPERTY GROUP LIMITED Astro Japan Property Group (ASX: